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SECOND DIVISION

[G.R. No. 114974. June 16, 2004.]


STANDARD CHARTERED BANK EMPLOYEES UNION (NUBE),
petitioner, vs. The Honorable MA. NIEVES R. CONFESOR, in
her capacity as SECRETARY OF LABOR AND EMPLOYMENT;
and the STANDARD CHARTERED BANK, respondents.
DECISION
CALLEJO, SR., J :
p

This is a petition for certiorari under Rule 65 of the Rules of Court led by the
Standard Chartered Bank Employees Union, seeking the nullication of the
October 29, 1993 Order 1 of then Secretary of Labor and Employment Nieves R.
Confesor and her resolutions dated December 16, 1993 and February 10, 1994.
The Antecedents
Standard Chartered Bank (the Bank, for brevity) is a foreign banking corporation
doing business in the Philippines. The exclusive bargaining agent of the rank and
le employees of the Bank is the Standard Chartered Bank Employees Union
(the Union, for brevity).
In August of 1990, the Bank and the Union signed a ve-year collective
bargaining agreement (CBA) with a provision to renegotiate the terms thereof on
the third year. Prior to the expiration of the three-year period 2 but within the
sixty-day freedom period, the Union initiated the negotiations. On February 18,
1993, the Union, through its President, Eddie L. Divinagracia, sent a letter 3
containing its proposals 4 covering political provisions 5 and thirty-four (34)
economic provisions. 6 Included therein was a list of the names of the members
of the Unions negotiating panel. 7
In a Letter dated February 24, 1993, the Bank, through its Country Manager
Peter H. Harris, took note of the Unions proposals. The Bank attached its
counter-proposal to the non-economic provisions proposed by the Union. 8 The
Bank posited that it would be in a better position to present its counter-proposals
on the economic items after the Union had presented its justications for the
economic proposals. 9 The Bank, likewise, listed the members of its negotiating
panel. 10 The parties agreed to set meetings to settle their dierences on the
proposed CBA.
Before the commencement of the negotiation, the Union, through Divinagracia,
suggested to the Banks Human Resource Manager and head of the negotiating
panel, Cielito Diokno, that the bank lawyers should be excluded from the
negotiating team. The Bank acceded. 11 Meanwhile, Diokno suggested to
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Divinagracia that Jose P. Umali, Jr., the President of the National Union of Bank
Employees (NUBE), the federation to which the Union was aliated, be excluded
from the Unions negotiating panel. 12 However, Umali was retained as a
member thereof.
On March 12, 1993, the parties met and set the ground rules for the negotiation.
Diokno suggested that the negotiation be kept a family aair. The proposed
non-economic provisions of the CBA were discussed rst. 13 Even during the nal
reading of the non-economic provisions on May 4, 1993, there were still
provisions on which the Union and the Bank could not agree. Temporarily, the
notation DEFERRED was placed therein. Towards the end of the meeting, the
Union manifested that the same should be changed to DEADLOCKED to
indicate that such items remained unresolved. Both parties agreed to place the
notation DEFERRED/DEADLOCKED. 14
On May 18, 1993, the negotiation for economic provisions commenced. A
presentation of the basis of the Unions economic proposals was made. The next
meeting, the Bank made a similar presentation. Towards the end of the Banks
presentation, Umali requested the Bank to validate the Unions guestimates,
especially the gures for the rank and le sta. 15 In the succeeding meetings,
Umali chided the Bank for the insuciency of its counter-proposal on the
provisions on salary increase, group hospitalization, death assistance and dental
benets. He reminded the Bank, how the Union got what it wanted in 1987, and
stated that if need be, the Union would go through the same route to get what it
wanted. 16
Upon the Banks insistence, the parties agreed to tackle the economic package
item by item. Upon the Unions suggestion, the Bank indicated which provisions
it would accept, reject, retain and agree to discuss. 17 The Bank suggested that
the Union prioritize its economic proposals, considering that many of such
economic provisions remained unresolved. The Union, however, demanded that
the Bank make a revised itemized proposal.
In the succeeding meetings, the Union made the following proposals:
Wage Increase:
1st Year Reduced from 45% to 40%
2nd Year Retain at 20%
Total = 60%
Group Hospitalization Insurance:
Maximum disability benet reduced from P75,000.00 to P60,000.00 per
illness annually
Death Assistance:
For the employee Reduced from P50,000.00 to P45,000.00
For Immediate Family
P25,000.00

Member

Reduced

from

P30,000.00

Dental and all others No change from the original demand.


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to

18
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In the morning of the June 15, 1993 meeting, the Union suggested that if the
Bank would not make the necessary revisions on its counter-proposal, it would be
best to seek a third party assistance. 19 After the break, the Bank presented its
revised counter-proposal 20 as follows:
Wage Increase: 1st Year from P1,000 to P1,050.00
2nd Year P800.00no change
Group Hospitalization Insurance
From: P35,000.00 per illness
To: P35,000.00 per illness per year
Death Assistance For employee
From: P20,000.00
To: P25,000.00
Dental Retainer Original oer remains the same 21

The Union, for its part, made the following counter-proposal:


Wage Increase: 1st Year 40%
2nd Year 19.5%
Group Hospitalization Insurance
From: P60,000.00 per year
To: P50,000.00 per year
Dental:
Temporary Filling/ P150.00
Tooth Extraction
Permanent Filling 200.00
Prophylaxis 250.00
Root Canal From P2,000 per tooth
To: 1,800.00 per tooth
Death Assistance:
For Employees: From P45,000.00 to P40,000.00
For Immediate Family Member: From P25,000.00 to P20,000.00.

22

The Unions original proposals, aside from the above-quoted, remained the same.
Another set of counter-oer followed:
Management Union
Wage Increase
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1st Year P1,050.00 40%


2nd Year 850.00 19.0%

23

Diokno stated that, in order for the Bank to make a better oer, the Union should
clearly identify what it wanted to be included in the total economic package.
Umali replied that it was impossible to do so because the Banks counter-proposal
was unacceptable. He furthered asserted that it would have been easier to
bargain if the atmosphere was the same as before, where both panels trusted
each other. Diokno requested the Union panel to refrain from involving
personalities and to instead focus on the negotiations. 24 He suggested that in
order to break the impasse, the Union should prioritize the items it wanted to
iron out. Divinagracia stated that the Bank should make the rst move and make
a list of items it wanted to be included in the economic package. Except for the
provisions on signing bonus and uniforms, the Union and the Bank failed to agree
on the remaining economic provisions of the CBA. The Union declared a deadlock
25 and led a Notice of Strike before the National Conciliation and Mediation
Board (NCMB) on June 21, 1993, docketed as NCMB-NCR-NS-06-380-93. 26
On the other hand, the Bank led a complaint for Unfair Labor Practice (ULP) and
Damages before the Arbitration Branch of the National Labor Relations
Commission (NLRC) in Manila, docketed as NLRC Case No. 00-06-04191-93
against the Union on June 28, 1993. The Bank alleged that the Union violated its
duty to bargain, as it did not bargain in good faith. It contended that the Union
demanded sky high economic demands, indicative of blue-sky bargaining. 27
Further, the Union violated its no strike- no lockout clause by ling a notice of
strike before the NCMB. Considering that the ling of notice of strike was an
illegal act, the Union ocers should be dismissed. Finally, the Bank alleged that
as a consequence of the illegal act, the Bank suered nominal and actual
damages and was forced to litigate and hire the services of the lawyer. 28
On July 21, 1993, then Secretary of Labor and Employment (SOLE) Nieves R.
Confesor, pursuant to Article 263(g) of the Labor Code, issued an Order assuming
jurisdiction over the labor dispute at the Bank. The complaint for ULP led by the
Bank before the NLRC was consolidated with the complaint over which the SOLE
assumed jurisdiction. After the parties submitted their respective position papers,
the SOLE issued an Order on October 29, 1993, the dispositive portion of which is
herein quoted:
WHEREFORE, the Standard Chartered Bank and the Standard Chartered
Bank Employees Union NUBE are hereby ordered to execute a
collective bargaining agreement incorporating the dispositions contained
herein. The CBA shall be retroactive to 01 April 1993 and shall remain
eective for two years thereafter, or until such time as a new CBA has
superseded it. All provisions in the expired CBA not expressly modied or
not passed upon herein are deemed retained while all new provisions
which are being demanded by either party are deemed denied, but
without prejudice to such agreements as the parties may have arrived at
in the meantime.
The Banks charge for unfair labor practice which it originally led with the
NLRC as NLRC-NCR Case No. 00-06-04191-93 but which is deemed
consolidated herein, is dismissed for lack of merit. On the other hand, the
Unions charge for unfair labor practice is similarly dismissed.

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Unions charge for unfair labor practice is similarly dismissed.


Let a copy of this order be furnished the Labor Arbiter in whose sala
NLRC-NCR Case No. 00-06-04191-93 is pending for his guidance and
appropriate action. 29

The SOLE gave the following economic awards:


1. Wage Increase:
a) To be incorporated to present salary rates:
Fourth year : 7% of basic monthly salary

Fifth year : 5% of basic monthly salary based


on the 4th year adjusted salary
b) Additional xed amount:
Fourth year : P600.00 per month
Fifth year : P400.00 per month
2. Group Insurance
a) Hospitalization : P45,000.00
b) Life : P130,000.00
c) Accident : P130,000.00
3. Medicine Allowance
Fourth year : P5,500.00
Fifth year : P6,000.00
4. Dental Benets
Provision of dental retainer as proposed by the Bank, but
without diminishing existing benets
5. Optical Allowance
Fourth year : P2,000.00
Fifth year : P2,500.00
6. Death Assistance
a) Employee : P30,000.00
b) Immediate : P5,000.00
Family
Member
7. Emergency Leave Five (5) days for each contingency
8. Loans
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a) Car Loan : P200,000.00


b) Housing Loan : It cannot be denied that the costs
attendant to having ones own home
have tremendously gone up. The
need, therefore, to improve on this
benet cannot be overemphasized.
Thus, the management is urged to
increase the existing and allowable
housing loan that the Bank extends
to its employees to an amount that
will give meaning and substance to
this CBA benet. 30

The SOLE dismissed the charges of ULP of both the Union and the Bank,
explaining that both parties failed to substantiate their claims. Citing National
Labor Union v. Insular-Yebana Tobacco Corporation, 31 the SOLE stated that ULP
charges would prosper only if shown to have directly prejudiced the public
interest.
SDAcaT

Dissatised, the Union led a motion for reconsideration with clarication, while
the Bank led a motion for reconsideration. On December 16, 1993, the SOLE
issued a Resolution denying the motions. The Union led a second motion for
reconsideration, which was, likewise, denied on February 10, 1994.
On March 22, 1994, the Bank and the Union signed the CBA. 32 Immediately
thereafter, the wage increase was eected and the signing bonuses based on the
increased wage were distributed to the employees covered by the CBA.
The Present Petition
On April 28, 1994, the Union led this petition for certiorari under Rule 65 of the
Rules of Procedure alleging as follows:
A. RESPONDENT HONORABLE SECRETARY COMMITTED GRAVE ABUSE OF
DISCRETION AMOUNTING TO LACK OF JURISDICTION IN
DISMISSING THE UNIONS CHARGE OF UNFAIR LABOR PRACTICE
IN VIEW OF THE CLEAR EVIDENCE OF RECORD AND ADMISSIONS
PROVING THE UNFAIR LABOR PRACTICES CHARGED. 33
B. RESPONDENT HONORABLE SECRETARY COMMITTED GRAVE ABUSE OF
DISCRETION AMOUNTING TO LACK OF JURISDICTION IN FAILING
TO RULE ON OTHER UNFAIR LABOR PRACTICES CHARGED. 34
C. RESPONDENT HONORABLE SECRETARY COMMITTED GRAVE ABUSE OF
DISCRETION AMOUNTING TO LACK OF JURISDICTION IN
DISMISSING THE CHARGES OF UNFAIR LABOR PRACTICES ON THE
GROUND THAT NO PROOF OF INJURY TO THE PUBLIC INTEREST
WAS PRESENTED. 35

The Union alleges that the SOLE acted with grave abuse of discretion amounting
to lack or excess of jurisdiction when it found that the Bank did not commit
unfair labor practice when it interfered with the Unions choice of negotiator. It
argued that, Dioknos suggestion that the negotiation be limited as a family
aair was tantamount to suggesting that Federation President Jose Umali, Jr. be
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excluded from the Unions negotiating panel. It further argued that contrary to
the ruling of the public respondent, damage or injury to the public interest need
not be present in order for unfair labor practice to prosper.
The Union, likewise, pointed out that the public respondent failed to rule on the
ULP charges arising from the Banks surface bargaining. The Union contended
that the Bank merely went through the motions of collective bargaining without
the intent to reach an agreement, and made bad faith proposals when it
announced that the parties should begin from a clean slate. It argued that the
Bank opened the political provisions up for grabs, which had the eect of
diminishing or obliterating the gains that the Union had made.
The Union also accused the Bank of refusing to disclose material and necessary
data, even after a request was made by the Union to validate its guestimates.
In its Comment, the Bank prayed that the petition be dismissed as the Union
was estopped, considering that it signed the Collective Bargaining Agreement
(CBA) on April 22, 1994. It asserted that contrary to the Unions allegations, it
was the Union that committed ULP when negotiator Jose Umali, Jr. hurled
invectives at the Banks head negotiator, Cielito Diokno, and demanded that she
be excluded from the Banks negotiating team. Moreover, the Union engaged in
blue-sky bargaining and isolated the no strike-no lockout clause of the existing
CBA.
The Oce of the Solicitor General, in representation of the public respondent,
prayed that the petition be dismissed. It asserted that the Union failed to prove
its ULP charges and that the public respondent did not commit any grave abuse
of discretion in issuing the assailed order and resolutions.
The Issues
The issues presented for resolution are the following: (a) whether or not the
Union was able to substantiate its claim of unfair labor practice against the Bank
arising from the latters alleged interference with its choice of negotiator;
surface bargaining; making bad faith non-economic proposals; and refusal to
furnish the Union with copies of the relevant data; (b) whether or not the public
respondent acted with grave abuse of discretion amounting to lack or excess of
jurisdiction when she issued the assailed order and resolutions; and, (c) whether
or not the petitioner is estopped from ling the instant action.
The Courts Ruling
The petition is bereft of merit.
Interference under Article
248 (a) of the Labor Code
The petitioner asserts that the private respondent committed ULP, i.e.,
interference in the selection of the Unions negotiating panel, when Cielito
Diokno, the Banks Human Resource Manager, suggested to the Unions
President Eddie L. Divinagracia that Jose P. Umali, Jr., President of the NUBE, be
excluded from the Unions negotiating panel. In support of its claim, Divinagracia
executed an adavit, stating that prior to the commencement of the
negotiation, Diokno approached him and suggested the exclusion of Umali from
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the Unions negotiating panel, and that during the rst meeting, Diokno stated
that the negotiation be kept a family aair.
Citing the cases of U.S. Postal Service 36 an d Harley Davidson Motor Co., Inc.,
AMF, 37 the Union claims that interference in the choice of the Unions bargaining
panel is tantamount to ULP.
In the aforecited cases, the alleged ULP was based on the employers violation of
Section 8(a)(1) and (5) of the National Labor Relations Act (NLRA), 38 which
pertain to the interference, restraint or coercion of the employer in the
employees exercise of their rights to self-organization and to bargain collectively
through representatives of their own choosing; and the refusal of the employer
to bargain collectively with the employees representatives. In both cases, the
National Labor Relations Board held that upon the employers refusal to engage
in negotiations with the Union for collective-bargaining contract when the Union
includes a person who is not an employee, or one who is a member or an ocial
of other labor organizations, such employer is engaged in unfair labor practice
under Section 8(a)(1) and (5) of the NLRA.
The Union further cited the case of Insular Life Assurance Co., Ltd. Employees
Association NATU vs. Insular Life Assurance Co. Ltd. , 39 wherein this Court
said that the test of whether an employer has interfered with and coerced
employees in the exercise of their right to self-organization within the meaning
of subsection (a)(1) is whether the employer has engaged in conduct which it
may reasonably be said, tends to interfere with the free exercise of employees
rights under Section 3 of the Act. 40 Further, it is not necessary that there be
direct evidence that any employee was in fact intimidated or coerced by
statements of threats of the employer if there is a reasonable inference that
anti-union conduct of the employer does have an adverse eect on selforganization and collective bargaining. 41
Under the International Labor Organization Convention (ILO) No. 87 FREEDOM
OF ASSOCIATION AND PROTECTION OF THE RIGHT TO ORGANIZE to which the
Philippines is a signatory, workers and employers, without distinction
whatsoever, shall have the right to establish and, subject only to the rules of the
organization concerned, to job organizations of their own choosing without
previous authorization. 42 Workers and employers organizations shall have the
right to draw up their constitutions and rules, to elect their representatives in full
freedom to organize their administration and activities and to formulate their
programs. 43 Article 2 of ILO Convention No. 98 pertaining to the Right to
Organize and Collective Bargaining, provides:
Article 2
1. Workers and employers organizations shall enjoy adequate protection
against any acts or interference by each other or each others
agents or members in their establishment, functioning or
administration.
2. In particular, acts which are designed to promote the establishment of
workers organizations under the domination of employers or
employers organizations or to support workers organizations by
nancial or other means, with the object of placing such
organizations under the control of employers or employers
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organizations within the meaning of this Article.

The aforecited ILO Conventions are incorporated in our Labor Code, particularly in
Article 243 thereof, which provides:
ART. 243. COVERAGE AND EMPLOYEES RIGHT TO SELF-ORGANIZATION.
All persons employed in commercial, industrial and agricultural
enterprises and in religious, charitable, medical or educational institutions
whether operating for prot or not, shall have the right to selforganization and to form, join, or assist labor organizations of their own
choosing for purposes of collective bargaining. Ambulant, intermittent
and itinerant workers, self-employed people, rural workers and those
without any denite employers may form labor organizations for their
mutual aid and protection.

and Articles 248 and 249 respecting ULP of employers and labor organizations.
The said ILO Conventions were ratied on December 29, 1953. However, even as
early as the 1935 Constitution, 44 the State had already expressly bestowed
protection to labor as part of the general provisions. The 1973 Constitution, 45 on
the other hand, declared it as a policy of the state to aord protection to labor,
specifying that the workers rights to self-organization, collective bargaining,
security of tenure, and just and humane conditions of work would be assured.
For its part, the 1987 Constitution, aside from making it a policy to protect the
rights of workers and promote their welfare, 46 devotes an entire section,
emphasizing its mandate to aord protection to labor, and highlights the
principle of shared responsibility between workers and employers to promote
industrial peace. 47
Article 248(a) of the Labor Code, considers it an unfair labor practice when an
employer interferes, restrains or coerces employees in the exercise of their right
to self-organization or the right to form association. The right to self-organization
necessarily includes the right to collective bargaining.
Parenthetically, if an employer interferes in the selection of its negotiators or
coerces the Union to exclude from its panel of negotiators a representative of the
Union, and if it can be inferred that the employer adopted the said act to yield
adverse eects on the free exercise to right to self-organization or on the right to
collective bargaining of the employees, ULP under Article 248(a) in connection
with Article 243 of the Labor Code is committed.
In order to show that the employer committed ULP under the Labor Code,
substantial evidence is required to support the claim. Substantial evidence has
been dened as such relevant evidence as a reasonable mind might accept as
adequate to support a conclusion. 48 In the case at bar, the Union bases its claim
of interference on the alleged suggestions of Diokno to exclude Umali from the
Unions negotiating panel.
The circumstances that occurred during the negotiation do not show that the
suggestion made by Diokno to Divinagracia is an anti-union conduct from which
it can be inferred that the Bank consciously adopted such act to yield adverse
eects on the free exercise of the right to self-organization and collective
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bargaining of the employees, especially considering that such was undertaken


previous to the commencement of the negotiation and simultaneously with
Divinagracias suggestion that the bank lawyers be excluded from its negotiating
panel.
The records show that after the initiation of the collective bargaining process,
with the inclusion of Umali in the Unions negotiating panel, the negotiations
pushed through. The complaint was made only on August 16, 1993 after a
deadlock was declared by the Union on June 15, 1993.
It is clear that such ULP charge was merely an afterthought. The accusation
occurred after the arguments and dierences over the economic provisions
became heated and the parties had become frustrated. It happened after the
parties started to involve personalities. As the public respondent noted, passions
may rise, and as a result, suggestions given under less adversarial situations
may be colored with unintended meanings. 49 Such is what appears to have
happened in this case.
The Duty to Bargain
Collectively
If at all, the suggestion made by Diokno to Divinagracia should be construed as
part of the normal relations and innocent communications, which are all part of
the friendly relations between the Union and Bank.
The Union alleges that the Bank violated its duty to bargain; hence, committed
ULP under Article 248(g) when it engaged in surface bargaining. It alleged that
the Bank just went through the motions of bargaining without any intent of
reaching an agreement, as evident in the Banks counter-proposals. It explained
that of the 34 economic provisions it made, the Bank only made 6 economic
counterproposals. Further, as borne by the minutes of the meetings, the Bank,
after indicating the economic provisions it had rejected, accepted, retained or
were open for discussion, refused to make a list of items it agreed to include in
the economic package.
Surface bargaining is dened as going through the motions of negotiating
without any legal intent to reach an agreement. 50 The resolution of surface
bargaining allegations never presents an easy issue. The determination of
whether a party has engaged in unlawful surface bargaining is usually a dicult
one because it involves, at bottom, a question of the intent of the party in
question, and usually such intent can only be inferred from the totality of the
challenged partys conduct both at and away from the bargaining table. 51 It
involves the question of whether an employers conduct demonstrates an
unwillingness to bargain in good faith or is merely hard bargaining. 52
The minutes of meetings from March 12, 1993 to June 15, 1993 do not show
that the Bank had any intention of violating its duty to bargain with the Union.
Records show that after the Union sent its proposal to the Bank on February 17,
1993, the latter replied with a list of its counter-proposals on February 24, 1993.
Thereafter, meetings were set for the settlement of their dierences. The
minutes of the meetings show that both the Bank and the Union exchanged
economic and non-economic proposals and counter-proposals.
The Union has not been able to show that the Bank had done acts, both at and

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The Union has not been able to show that the Bank had done acts, both at and
away from the bargaining table, which tend to show that it did not want to reach
an agreement with the Union or to settle the dierences between it and the
Union. Admittedly, the parties were not able to agree and reached a deadlock.
However, it is herein emphasized that the duty to bargain does not compel
either party to agree to a proposal or require the making of a concession. 53
Hence, the parties failure to agree did not amount to ULP under Article 248(g)
for violation of the duty to bargain.
We can hardly dispute this nding, for it nds support in the evidence.
The inference that respondents did not refuse to bargain collectively with
the complaining union because they accepted some of the demands while
they refused the others even leaving open other demands for future
discussion is correct, especially so when those demands were discussed
at a meeting called by respondents themselves precisely in view of the
letter sent by the union on April 29, 1960 . . . 54

In view of the nding of lack of ULP based on Article 248(g), the accusation that
the Bank made bad-faith provisions has no leg to stand on. The records show
that the Banks counterproposals on the non-economic provisions or political
provisions did not put up for grabs the entire work of the Union and its
predecessors. As can be gleaned from the Banks counterproposal, there were
many provisions which it proposed to be retained. The revisions on the other
provisions were made after the parties had come to an agreement. Far from
buttressing the Unions claim that the Bank made bad-faith proposals on the
non-economic provisions, all these, on the contrary, disprove such allegations.
We, likewise, nd that the Union failed to substantiate its claim that the Bank
refused to furnish the information it needed.
While the refusal to furnish requested information is in itself an unfair labor
practice, and also supports the inference of surface bargaining, 55 in the case at
bar, Umali, in a meeting dated May 18, 1993, requested the Bank to validate its
guestimates on the data of the rank and le. However, Umali failed to put his
request in writing as provided for in Article 242(c) of the Labor Code:
Article 242. Rights of Legitimate Labor Organization . . .
(c) To be furnished by the employer, upon written request, with the
annual audited nancial statements, including the balance sheet and the
prot and loss statement, within thirty (30) calendar days from the date
of receipt of the request, after the union has been duly recognized by the
employer or certied as the sole and exclusive bargaining representatives
of the employees in the bargaining unit, or within sixty (60) calendar days
before the expiration of the existing collective bargaining agreement, or
during the collective negotiation;

The Union, did not, as the Labor Code requires, send a written request for the
issuance of a copy of the data about the Banks rank and le employees.
Moreover, as alleged by the Union, the fact that the Bank made use of the
aforesaid guestimates, amounts to a validation of the data it had used in its
presentation.
No Grave Abuse of Discretion
On the Part of the Public Respondent
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The special civil action for certiorari may be availed of when the tribunal, board,
or ocer exercising judicial or quasi-judicial functions has acted without or in
excess of jurisdiction and there is no appeal or any plain, speedy, and adequate
remedy in the ordinary course of law for the purpose of annulling the proceeding.
56 Grave abuse of discretion implies such capricious and whimsical exercise of
judgment as is equivalent to lack of jurisdiction, or where the power is exercised
in an arbitrary or despotic manner by reason of passion or personal hostility
which must be so patent and gross as to amount to an invasion of positive duty
or to a virtual refusal to perform the duty enjoined or to act at all in
contemplation of law. Mere abuse of discretion is not enough. 57
While it is true that a showing of prejudice to public interest is not a requisite for
ULP charges to prosper, it cannot be said that the public respondent acted in
capricious and whimsical exercise of judgment, equivalent to lack of jurisdiction
or excess thereof. Neither was it shown that the public respondent exercised its
power in an arbitrary and despotic manner by reason of passion or personal
hostility.

Estoppel not Applicable


In the Case at Bar
The respondent Bank argues that the petitioner is estopped from raising the
issue of ULP when it signed the new CBA.
Article 1431 of the Civil Code provides:
Through estoppel an admission or representation is rendered conclusive
upon the person making it, and cannot be denied or disproved as against
the person relying thereon.

A person, who by his deed or conduct has induced another to act in a particular
manner, is barred from adopting an inconsistent position, attitude or course of
conduct that thereby causes loss or injury to another. 58
In the case, however, the approval of the CBA and the release of signing bonus
do not necessarily mean that the Union waived its ULP claim against the Bank
during the past negotiations. After all, the conclusion of the CBA was included in
the order of the SOLE, while the signing bonus was included in the CBA itself.
Moreover, the Union twice led a motion for reconsideration respecting its ULP
charges against the Bank before the SOLE.
The Union Did Not Engage
In Blue-Sky Bargaining
We, likewise, do not agree that the Union is guilty of ULP for engaging in bluesky bargaining or making exaggerated or unreasonable proposals. 59 The Bank
failed to show that the economic demands made by the Union were exaggerated
or unreasonable. The minutes of the meeting show that the Union based its
economic proposals on data of rank and le employees and the prevailing
economic benets received by bank employees from other foreign banks doing
business in the Philippines and other branches of the Bank in the Asian region.
In sum, we nd that the public respondent did not act with grave abuse of
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discretion amounting to lack or excess of jurisdiction when it issued the


questioned order and resolutions. While the approval of the CBA and the release
of the signing bonus did not estop the Union from pursuing its claims of ULP
against the Bank, we nd the latter did not engage in ULP. We, likewise, hold that
the Union is not guilty of ULP.
IN LIGHT OF THE FOREGOING, the October 29, 1993 Order and December 16,
1993 and February 10, 1994 Resolutions of then Secretary of Labor Nieves R.
Confesor are AFFIRMED. The Petition is hereby DISMISSED.
SO ORDERED.
Puno, Quisumbing, Austria-Martinez and Tinga, JJ ., concur.
Footnotes

1. Rollo, pp. 451464.


2. The expiration of the CBA is on March 31, 1993.
3. Rollo, pp. 120121.
4. Id. at 122141.
5. Sometimes referred to as non-economic provisions.
6. Uniforms, signing bonus, wages, group insurance, medicine allowance, dental
benets, optical allowance, death assistance, additional month in midyear
allowance, additional 2.5% in the tellers guarantee fund; prot-sharing
provision, improvements in leave benets, i.e., maternity, vacation, sick,
emergency and union leave; introduction of paternity leave, marriage leave,
birthday leave and loyalty leave; extension of the enjoyment of salary
increments from 35 to 40 years of service; provision for meal and shift
allowances; increase in overtime, weekend, holiday and shift allowances;
increase emergency premiums, increase in availments of housing
corresponding lowering of interest rates and eligibility requirements, and
deletion of the current rules on availment; improvement of gratuities to a
maximum of 175% and increase of medical benets (Rollo, p. 142).
7. Eddie L. Divinagracia, Rogelio Fernando, Nancy G. Sagum, Rebecca Gabay, Ray
Michael Quimpo, Reyel G. Vargas, Cipriano Garcia, Alberto Diaz, Ed De Mesa and
Jose P. Umali, Jr.
8. The Banks counterproposal centered on union recognition and scope (appropriate
bargaining agreement), union security and check-o (maintenance of
membership), new employees, collection of union dues, job security, hiring of
next of kin, temporary personnel, redundancies, closure and relocation,
management prerogative, uniforms and grievance procedures. With respect to
the counterproposals on all economic provisions, the Bank said that it is open
for discussion. (Rollo, p. 144).
9. Rollo, p. 142.
10. Pinky Diokno (sometimes referred to as Cielito Diokno), Jose S. Ho, Rene Padlan,
Rolando Orbeta, Janet Camarista, Sinforoso Morada and Modesto B. Lim.
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11. Rollo, p. 544.


12. Id. at 288.
13. The negotiations for the non-economic provisions were made on March 12, 16,
23, and 30, 1993; April 6, 13, 20, 23 and 28, 1993 and May 4, 1993.
14. The Union dened DEADLOCKED as exhaustion of the three readings; Rollo, p.
269.
15. Minutes of the Meeting of June 1, 1993; Rollo, p. 277.
16. Rollo, p. 278.
17. Minutes of the Meeting of June 8, 1993; Rollo, p. 281.
18. Rollo, p. 284.
19. Ibid.
20. Rollo, pp. 284285.
21. Id. at 285.
22. Id. at 285.
23. Id.
24. Id.
25. Minutes of the Meeting of June 15, 1993; Rollo, p. 286.
26. Rollo, p. 683.
27. Blue-Sky Bargaining is dened as unrealistic and unreasonable demands in
negotiations by either or both labor and management, where neither concedes
anything and demands the impossible. It actually is not collective bargaining at
all. (Harold S. Roberts, Roberts Dictionary of Industrial Relations (Revised
Edition, 1971, p. 51); Rollo, p. 671.
28. Rollo, pp. 670676.
29. Id. at 463464.
30. Id. at 459460.
31. 2 SCRA 924 (1961).
32. Rollo, pp. 562611.
33. Id. at 10.
34. Id. at 23.
35. Id. at 24.
36. 280 NLRB No. 80 280 NLRB No. 8
37. 214 NLRB No. 062.
38. Section 8.a . It shall be unfair labor practice for an employer
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(1) To interfere with, restrain or coerce employees in the exercise of their rights
guaranteed under Section 7;
xxx xxx xxx
(5) To refuse to bargain collectively with the representatives of his employees,
subject to the provisions of Section 9. (National Labor Management Act)
Section 7. Employees shall have the right to self-organization, to form, join or assist
labor organizations, to bargain collectively through representatives of their own
choosing; and to engage in other concerted activities for the purpose of
collective bargaining or other mutual aid or protection, and shall also have the
right to refrain from any or all of such activities except to the extant that such
right may be aected by an agreement requiring membership in a labor
organization as a condition of employment as authorized in Section 8(a)(3.)
39. 37 SCRA 244 (1971).
40. Section 3. Employees Right to Self-Organization. Employees shall have the right
to self-organization and to form, join or assist labor organizations of their own
choosing for the purpose of collective bargaining through representatives of
their own choosing and to engage in concerted activities for the purpose of
collective bargaining and other mutual aid or protection. Individuals employed as
supervisors shall not be eligible for membership in a labor organization of
employees under their supervision but may form separate organizations of
their own.
xxx xxx xxx
Section 4. Unfair Labor Practices.
(a) It shall be unfair labor practice for an employer:
(1) To interfere with, restrain or coerce employees in the exercise of their rights
guaranteed in Section three; (Republic Act No. 875)
41. Referring to Section 3 and 4(a)(1) of the Industrial Peace Act, Republic Act No.
875.
42. Article 2, ILO Convention No. 87.
43. Article 3, ILO Convention No. 87.
44. Section 6, Article XIV of the 1935 Constitution provides:
Sec. 6. The State shall aord protection to labor, especially to working women and
minors, and shall regulate the relations between landowner and tenant, and
between labor and capital in industry and in agriculture. The State may provide
for compulsory arbitration.
45. Section 9, Article II of the 1973 Constitution provides:
Sec. 9. The State shall aord protection to labor, promote full employment and
equality in employment, ensure equal work opportunities regardless of sex,
race, or creed, and regulate the relations between workers and employers. The
State shall assure the rights of workers to self-organization, collective
bargaining, security of tenure, and just and humane conditions of work. The
State may provide for compulsory arbitration.
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46. Section 18, Article II of the 1987 Constitution provides:


Sec. 18. The State arms labor as a primary social economic force. It shall protect
the rights of workers and promote their welfare.
47. Section 3, Article XIII on Social Justice and Human Rights reads as follows:
LABOR
Sec. 3. The State shall aord full protection to labor, local and overseas, organized
and unorganized and unorganized, and promote full employment and equality
of employment opportunities for all.
It shall guarantee the rights of all workers to self-organization, collective bargaining
and negotiations, and peaceful concerted activities, including the right to strike
in accordance with law. They shall be entitled to security of tenure, humane
conditions of work, and a living wage. They shall also participate in policy and
decision-making processes aecting their rights and benets as may be
provided by law.
The State shall promote the principle of shared responsibility between workers and
employers and the preferential use of voluntary modes in settling disputes,
including conciliation, and shall enforce their mutual compliance therewith to
foster industrial peace.
The State shall regulate the relations between workers and employers, recognizing
the right of labor to its just share in the fruits of production and the right of
enterprises to reasonable return on investments, and to expansion and growth.
48. Rubberworld (Phils.), Inc. vs. NLRC, 175 SCRA 450 (1989).
49. Rollo, p. 462.
50. K-Mart Corporation vs. National Labor Relations Board , 626 F.2d 704 (1980).
51. Luck Limousine, 312 NLRB 770, 789 (1993).
52. Queen Mary Restaurants Corp. and Q.M. Foods, Inc. vs. National Labor Relations
Board, 560 F.2d 403 (1977).
53. Eastern Maine Medical Center vs. National Labor Relations Board , 658 F.2d 1
(1981).

54. National Union of Restaurant Workers (PTUC) vs. Court of Industrial Relations , 10
SCRA 843 (1964).
55. K-Mart Corporation vs. NLRB, supra.
56. Guerrero vs. Commission on Elections, 336 SCRA 458 (2000).
57. Santos vs. Commission on Elections, 399 SCRA 611 (2003).
58. Navarro vs. Second Laguna Development Bank, 398 SCRA 227 (2003).
59. Arthur A. Sloane and Fred Witney, Labor Relations, 7th Edition 1991, p. 195.

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